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Loews Closes Back Bay Buy

Loews Hotels & Resorts, a wholly owned-subsidiary of Loews Corporation (L - Free Report) , closed the purchase of Back Bay Hotel from The Doyle Collection. Concurrently, the hotel was re-branded under the Loews Hotels brand.

Loews Hotels also intends to renovate the property, which will cost nearly $8 million. The refurbishment work is expected to begin in fall 2013.

Back Bay Hotel comprises 225 guestrooms, a meeting and event space, two dining options, Cuffs, an Irish Bar and The Stanhope Grille, and is located at the corner of Berkeley and Stuart Streets.

Apart from nearly doubling its hotel count, the company expects a threefold increase in its net income in the next three years. As a part of the goal, Loews Hotels & Resorts acquired two hotels - Madison Hotel in Washington, D.C. and Renaissance Hotel & Spa in Hollywood, Calif. - in 2012. It has another two hotels - The Loews Chicago Hotel, scheduled to open in Jan 2015 and Cabana Bay Beach Resort at Universal Orlando, scheduled to open in 2014 – under construction. With this buy, Loews tally reaches 21 hotels.

Loews, in fourth quarter 2012, posted operating net income of 18 cents per share, which lagged the Zacks Consensus Estimate of 29 cents by a significant margin and plummeted 77% year over year. Lower earnings at Diamond Offshore and CNA Financial along with lower parent company investment income weighed on the results.

However, in the last reported quarter, Loews Hotels posted the highest growth in revenue, up 45.3% year over year to $125 million. However, net loss was $2 million.

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